Tax and fiscal policy will loom large in the next president's domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010 and the individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans. While a permanent fix palatable to both political parties has proven elusive, both candidates have proposed major tax changes. This report describes how we performed our modeling and analysis, outlines the major tax proposals, and discusses the implications of their policies for the revenue raised, taxpayer economic activity, and the distribution of the tax burden.

Here is the bottom line:

If enacted, the Obama and McCain tax plans would have radically different effects on the distribution of tax burdens in the United States. The Obama tax plan would make the tax system significantly more progressive by providing large tax breaks to those at the bottom of the income scale and raising taxes significantly on upper-income earners. The McCain tax plan would make the tax system more regressive, even compared with a system in which the 2001–06 tax cuts are made permanent. It would do so by providing relatively little tax relief to those at the bottom of the income scale while providing huge tax cuts to households at the very top of the income distribution.

In the first detailed analysis of the Barack Obama and John McCain tax plans, the Tax Policy Center has run their proposals through the Big Computer and discovered that their schemes are, well, painfully predictable. Each would raise the national debt by trillions of dollars. Obama would use the money to provide modest tax cuts to low- and moderate-income people while imposing stiff tax hikes on the very wealthy. McCain would cut taxes a bit for the working-class and a lot for the rich.

Obama, who casts himself as an out-of-the box, post-partisan politician, has put together a fairly conventional Democratic tax plan. Despite McCain’s recent claim that Obama would raise taxes for all, it turns out that middle-class families would do better under Obama (who would cut their taxes by $1000 in 2009) than McCain (who would cut them by only $300). Obama’s generosity comes at a price, however, He’d raise the national debt by a staggering $3.3 trillion over the next decade, and that includes more than $900 billion in promised revenue raisers that TPC could not verify.

McCain, who once opposed President Bush’s 2001 and 2003 tax cut as a give-away to the rich, but now embraces them, has designed a plan more consistent with the New McCain than the old. It is as Republican a plan as Obama’s is Democratic. The top 20% of taxpayers get a 3% reduction in after-tax income in 2009, while the lowest-earning 60% would get less than 1%.

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Comments

How was the effect on the deficit of each candidates policies calculated? For instance, I noticed no mention of Obama's stated official policy of removing all combat brigades from iraq within 16 months, and McCain's policy of not doing this. How could the effect on the deficit or each candidates policies be calculated without considering this?

Posted by: chris green | Jun 12, 2008 9:18:41 AM

Just to be clear, McCain's plan costs more than Obama's. More from the tax vox blog article:

Keeping to the pattern of Bush-era Republicans, McCain would also go deeper into the red than Obama. Including interest, he’d increase the national debt by $4.5 trillion over a decade.

Posted by: Josh | Jun 12, 2008 9:23:20 AM

"Under either Senator Obama’s or Senator McCain’s plan, however, the debt would likely continue to rise as it has over the past eight years, even under the CBO’s relatively optimistic assumptions about spending. Senator Obama’s plan would add $3.3 trillion to the national debt (including additional interest costs) while Senator McCain’s plan would add $4.5 trillion."

I just wanted to point out that, according to the report, the deficit would increase by $1.2 trillion more under the McCain plan.

Can we get a chart that shows the change in the effective tax rates of the groups, as a percent of their current rates? In other words, remove from the charts the influence of the fact that the top 1% or 0.1% simply HAS MORE MONEY and ALREADY PAYS HIGHER RATES so that we can get a proper look at what actually happens to people's rates.

Posted by: DaveS | Jun 12, 2008 11:31:09 AM

Under MY tax plan, we round up all the politicians, harvest their organs, and sell them to the highest bidder.

Could you be a little more specific about what income brackets (at least approximately) constitute "rich", "middle income", and "lower income"? Aren't these categories geographically relative for at the least those borderline cases between each one? 150000 might be "rich" in some modest size cities while in NYC or DC it may not buy quite as much living space or food stuffs.

Thank you

Posted by: Andrew | Jun 12, 2008 11:33:34 AM

This article does not point out that Sen. Obama wants to raise the capital gains tax, which he AGREES would decrease income to the federal government, but he's okay with it, because it increases fairness.

Also, historically, lowering taxes on the wealthy induces them to invest in the economy, which benefits everybody.

Posted by: Haley | Jun 12, 2008 11:34:52 AM

Could you be a little more specific about what income brackets (at least approximately) constitute "rich", "middle income", and "lower income"? Aren't these categories geographically relative for at the least those borderline cases between each one? 150000 might be "rich" in some modest size cities while in NYC or DC it may not buy quite as much living space or food stuffs.

Thank you

Posted by: Andrew | Jun 12, 2008 11:35:03 AM

Can we get a chart that shows the change in the effective tax rates of the groups, as a percent of their current rates? In other words, remove from the charts the influence of the fact that the top 1% or 0.1% simply HAS MORE MONEY and ALREADY PAYS HIGHER RATES so that we can get a proper look at what actually happens to people's rates.

Posted by: DaveS | Jun 12, 2008 11:35:06 AM

"Despite McCain’s recent claim that Obama would raise taxes for all, it turns out that middle-class families would do better under Obama (who would cut their taxes by $1000 in 2009) than McCain (who would cut them by only $300)."

I wish that writers would stop using the term 'middle class'. This is term with such an incredibly wide definition as to be worthless. In high cost of living areas such as Chicago or New York, $100k a year gets you a pretty good middle class life (although not necessarily a single-family home). In rural Iowa, you would be considered rich.

Also, referencing 'quintiles' also tells me nothing. The quoted sentence should read: " Despite McCain’s recent claim that Obama would raise taxes for all, it turns out that a family of 4 with an adjusted gross income of $xx,xxx would do better under Obama (who would cut their taxes by $1000 in 2009) than McCain (who would cut them by only $300).

The quoted text and tables above may as well be composed in latin for all the information they provide to non-economists.

Posted by: Bankerdanny | Jun 12, 2008 11:35:20 AM

Also, these reports don't attempt to account for increased tax revenues due to economic growth... they always over-estimate what a tax cut will "cost", and never manage to predict that tax cuts will increase tax receipts. It's always "let's plug these percentages into the current budget and IRS data and then pretend we know what it will do to the debt."

This particular analysis appears to be even more superficial than these things usually are.

Posted by: DaveS | Jun 12, 2008 11:39:30 AM

Anyone EVER think about restraining SPENDING?

Tax cuts don't "COST" the government anything.

Posted by: deek | Jun 12, 2008 11:57:18 AM

Ok, so I dug through the report and the 'quitiles are as follows:

Lowest: $18,981
Second: $37,595
Middle: $66,354
Fourth: $111,645
Top: I can't really tell from the notes but it
would be over $161k
Top 1%: $603,402
Top 0.1%: $2,871,682

But this doesn't answer the question of what is considered 'middle class'.

Lastly, it makes sense that those in the lower quitiles see the least increase in after tax income since they already pay very little in taxes. Short of increasing the amount of 'refundable' tax credits there is no way to substantially improve there income.

Posted by: Bankerdanny | Jun 12, 2008 11:57:33 AM

Do the deficit forecasts in the study consider the dynamic effects of tax cuts?

The rich save more from their tax cuts. Their savings increase capital formation and economic growth. Increased economic growth leads to higher incomes for most income classes and, thus, more tax collections.

If dynamic effects have not been considered in the study, then the future deficit forecasts will be overstated (just like most government forecasts of previous tax cuts that "favored the rich.")

Posted by: Dale Newland | Jun 12, 2008 11:57:44 AM

Your blog post is technically correct, yet utterly misleading.

If we take the current (very "progressive") law as the baseline, then any cut for the rich would make McCain's system "more regressive". If the rich pay 33% instead of 35%, that makes it "regressive".

Never mind the fact that 33% is a LOT higher than most people pay per dollar of income... Plus the rich have more dollars to tax.

I would add another chart with actual tax rates proposed for each quintile, along with an indication of "before" and "after" rates.

McCain's plan is not at all "regressive". It hoses high-earners slightly lessthan they are used to.

A more complete explanation would start, "McCain's tax plans remain quite progressive, but the top rates are brought a few percentage points closer to the rates paid by the middle class. This is done to increase simplicity, reduce tax avoidance & evasion, reduce the disincentives to investing in the US, and encourage economic growth."

Posted by: Stephen W. Stanton | Jun 12, 2008 12:12:44 PM

McCain's going to have a Demo Congress, so there will be no further tax cuts and no extension of the Bush tax cuts after 2010(which equals a tax increase, not a cut). As for Obama, he will raise them in January 2009.

Also, please don't give me charts showing percentage changes by income group. The fact of the matter is that the "wealthiest" pay almost all of the taxes, period, whether McCain or Obama.

Posted by: Frank Hulton | Jun 12, 2008 12:15:19 PM

The most disgusting thing about the analysis is that government spending is projected to be 19.5% of GDP in 2013. This should throw every thinking taxpayer into fits of apoplectic rage! There's the answer to the deficit - cut spending!!

Posted by: Dan | Jun 12, 2008 12:15:45 PM

Please explain to me how the lowest quintile of income earners would see significantly lower taxes, if most of them are already paying next to nothing in federal income taxes?

Posted by: Punditarian | Jun 12, 2008 12:19:20 PM

Is this the same CBO that only does "static" analysis? Does this result take into account the actions people will take to either earn more/less money or step they will take to protect capital from the taxman?

Does the analysis take into account the Laffer curve or this just more of the same old stuff always trotted out to refute any potential tax cuts?

Why does all this stuff "cost" the government money? Maybe they should get/keep taxes low and STOP SPENDING!!

Posted by: northwoods | Jun 12, 2008 12:21:01 PM

Hmmm, still skirting the painfully obvious is the day's exercise, eh?

Until and only when ALL entitlements are dumped (that ever lasting War on Poverty programs by LBJ and those insidious socialist programs started by FDR) it won't matter which of these two clowns' tax & extort plans goes into effect... It won't matter...

Posted by: juandos | Jun 12, 2008 12:22:47 PM

Trust me, you do NOT want to include the proposed cost of canidates' policies in this analysis.

First of all chris green, each plan's the effect on the deficit is independent of other spending priorities.
Second, if you want to add to McCain's total the cost of the Iraq war, then I am sure you agree that we need to add the cost of Obama's universal health care plan to his total. I mean, if you really want to have a principled debate about fiscal responsibility, and I am sure that is what you wanted to do.

Posted by: Joe Clerk | Jun 12, 2008 12:38:04 PM

"The McCain tax plan would make the tax system more regressive, even compared with a system in which the 2001–06 tax cuts are made permanent."

Huh? Our federal tax system is highly PROGRESSIVE in both rate and hard dollars. A minority of voters pay the majority of taxes in this country with the top 10% of earners picking up about 50% of the burden by themselves and the bottom 10+% of earners paying none and actually benefiting with standard EIC credits and the like.

McCain's plan would in no way transform our tax system into a regressive system. We should just stick to the Bush rates because income inflation and bracket creep will slowly tend to cover growth (at which time they should be adjusted down again). McCain's plan to reduce Corporate taxes to 25% is sound because it evens the playing field with our world trade partners and will eliminate the non-value-added jockeying of accounts and company ownership for reasons of tax avoidance.

Obama’s plan is a populist disaster. Already the second earner in the average professional two earner household pays about half of their income in taxes of one form or another (including SSI, Federal Income taxes, and sales tax on the additional income; not to mention commuting costs, etc…). A hike like Obama is suggesting will have the effect of pushing more families into making lifestyle decisions to play defense with the family budget rather than offense. It’s suddenly a toss up as to whether one quits his job to stay home with the family or continues to work the first half of his day for Uncle Sam. They can fire the baby sitter and the lawn service in favor of just doing little things like this themselves… they’ll clip coupons and manage their household budget; cook-in rather than go out; wash and service their own cars rather than pay others to do this for them. The net result is the professional who quits has improved his lifestyle but is not adding value to the economy in his/her trained specialty (the economy suffers). The family is also spending a lot less because they are playing defense rather than offense with the family budget (the economy suffers). Child care, lawn care, housekeepers, restaurants have their revenues depressed because the highly trained professional finds it more beneficial to just do these things himself because of government’s penalty upon him for doing his trade (the economy suffers). And that big tax burden that’s paid every year because the second earner pays full SSI and the highest marginal rates on his entire income is gone (the economy suffers).

People with high incomes are usually pretty smart and it should be considered that we often work by choice rather than necessity. Keep pushing… I can swing a hammer a couple of days a week doing home improvements on my primary residence and flip it for the tax-free gain every two years if I like. That beats funding the campaigns of populist politicians who want to buy favor with the promise of redistributing my money and my hard work. I can easily replace the half of my income government lets me keep with an improved family lifestyle that includes defensive rather than offensive budgeting. It’s really not a big deal to me but you populists politicians who think that flushing my money through an inefficient, often corrupt and politically motivated bureaucracy to do ‘your’ definition of good is smart fiscal policy… well you should consider what you’ll be losing.

Bravo, Stephen W. Stanton and Punditarian. One or two charts that express everything in terms of percent change with no reference or clear explanation as to "percent of what" rarely provides the quality of quantity of data presumed. I, too, have a hard time understanding how Sen. Obama's proposal could have so significant an effect upon the lowest quintile without actually representing either complete abolition or, more likely, expanded "credits" (i.e. government largess).

When you look at sources of federal revenue, we are dangerously approaching the point of no return. By this, I mean that once more than 50% of the population has no federal tax liability they no longer have any personal stake in curtailing the growth of the federal government and its attendent tax burden. In today's global economy I don't think it would take too many cycles of significant tax increases on the "rich" before the very people who have the economic ability and demonstrated motivation to take action simply take their bat and ball and go home (i.e. move).

Didn't the Democrats ever hear the story about the goose that layed the golden egg?

I'm just curious, because I think it would be helpful to know which Dem candidate was really interested in "protecting the middle class," if either really were.

Posted by: amf | Jun 12, 2008 1:25:31 PM

Predicting the effect of tax policy on revenue multiple years in the future is about as accurate as the annual hurricane forecast.

The number of factors that effect the amount of revenue collected by the government are so complicated that any projections prepared by anybody don't even rise to the level of an educated guess.

Posted by: Bankerdanny | Jun 12, 2008 1:31:14 PM

Obama reminds me of when England levied taxes of *90%* on "rich" rockstars and athletes. Instead of reaping a lot of tax money, it just caused those "rich" folks to leave the country. That's why John Lennon was living in New York city instead of London, for example.

chicopanther

Posted by: chicopanther | Jun 12, 2008 2:11:07 PM

Punditarian, submandave: the chart shows percentage change in after-tax income. A bar of a given size on the lowest quintile therefore refers to fewer dollars than a bar of the same size.

Under the Obama plan, it looks like about 5.6% change for the bottom quint. So if you're making 25K and paying 20% (5K) in taxes (figures completely ex recto), your after tax income is 20K; a 5.6% change would mean your after tax income is 21.12K -- paying $3880 in taxes instead of $5000 in taxes. Of course, if you're tired of people making $25K freeloading off the government, you're entitled to prefer McCain's plan.

Posted by: Hamilton-Lovecraft | Jun 12, 2008 2:36:17 PM

I notice they included McCain's summer gas tax holiday (which is a joke) but left out Obama's windfall profit tax on oil companies (bigger joke). I don't suppose the Brookings Inst would be biased, would it?

Posted by: Mr. K | Jun 12, 2008 3:38:01 PM

What about the fact that McCain's tax plan doesn't have a shot of being passed, but Obama's tax cut will easily pass?

Posted by: Cliff | Jun 12, 2008 4:20:17 PM

We are on the brink of encouraging the wealthiest Americans to leave the US and instead continue their affairs from Dubai, Hong Kong, Ireland, Singapore, etc. (all of which have income tax rates in the teens).

What happens to the US economy then, after no one is driving the bus?

In an attempt to take 45% of their income, you will end up collecting zero. Leftists will then try to prevent them from leaving, as America becomes more like Cuba or East Berlin.

Posted by: GK | Jun 12, 2008 4:53:07 PM

Any idiot who talks about the national debt rising by $4.5T in a decade has not educated themselves on the basic concept of inflation.

Debt may rise $4.5T, but GDP will rise $7T. Thus, the debt will be the same percentage of GDP as it has been for the last 25 years.

Posted by: GK | Jun 12, 2008 4:55:18 PM

I'm not convinced because you haven't perhaps addressed the issue of raising the cap on FICA taxes from $100,000 to $200,000 which is part of Obanma's plan. I believe that would be an enormous increase in taxes across that income range.

At least the top quintile still gets a cut by 2012 under Obama. Thus, his plan is slightly less bad than I thought it was.

Posted by: GK | Jun 12, 2008 5:13:23 PM

Someone should ask Obama: Who is John Galt?

Posted by: Jake | Jun 12, 2008 7:00:55 PM

BO will, by necessity, find a way to confiscate assets, not just income. It's the only way he can deliver the promised goods to his constituency. The marginal rates on income are already pushing the limits of Laffer curve optimization of revenue. Higher marginal rates on the rich will lower total revenue. This election will pit old people on fixed incomes against young people getting squeezed by demographic social safety net realities. The young support BO and the old will increasingly support McCain once they realize what BO intends to do with their assets. If he's smart, McCain will make sure the elderly get this message along with anyone hoping for an inheritance.

Posted by: bc | Jun 12, 2008 8:57:45 PM

What is this, a Libertarian Party convention?

Posted by: Nancy Irving | Jun 12, 2008 11:20:02 PM

If the top 10% own 90% of the assets but only pay 50% of the tax I'd say they are paying very little in the way of taxes.

Posted by: Toon | Jun 19, 2008 8:39:54 PM

While computing the annual income tax, taxpayers can offset the amount of tax relief granted against the income tax that they owe to the government. Similar to personal tax allowance, tax relief for employees is offered throughout the year. Tax relief is normally placed under various categories as tax relief for employees, self-employed people, training and educational institutions, property, medical and insurance premiums, and payments to charitable institutions.

"Obama reminds me of when England levied taxes of *90%* on "rich" rockstars and athletes."
--------------------------------------------

What? Obama is going to raise the top rate to 90%? I must have really missed something here...

Posted by: Mark | Aug 9, 2008 10:52:03 PM

Thanks, this is a great blog. Here is an idea that I was thinking about, but that you would be much more qualified to do:

Can you post a website where people could enter their income, deductions, capital gains, etc. over the upcoming year(s) and the program would estimate (without being binding, of course) their tax burden? That would be GREAT to see and I'm sure you could generate some nice hits for that.

Posted by: Michael Posner | Sep 4, 2008 11:35:01 AM

This doesn't tell the full story. What Obama's plan is doing is a huge redistribution of wealth.

Under McCain's plan, those making under $19K a year will pay $19 less in taxes. Why? They typically pay very little, if any taxes, anyway. Under Obama's plan, they would get a $567 tax break.

Compare this to the tax changes for those making between $227K and $603K. Under McCain's plan, those taxpayers would pay $7871 less, while under Obama's plan, those taxpayers would pay $12 more.

To the uninformed, one would look at these numbers and say, "McCain wants to give money to rich." In fact, what McCain is doing is cutting the tax rate on the top income earners from an extremely high rate to a high rate, while Obama is essentially moving this money to the lower income earners, making it so they on average, will get back more money than they actually paid in.

As usual, the Republicans understand the American capitalistic system, while the Democrats simply want to make taxes fairer, taking money from Uncle Sam to put it back in the pockets of taxpayers.

Here's a simple example:

Let's say that someone makes $1 million and pays $200K in taxes (effectively a 20% tax rate). If this person's tax burden drops to 18%, that would mean that they would pay $180K in taxes, $20K less than they did before.

In comparison, let's say that someone who makes $20K per year pays $400 in taxes (effectively a 2% tax rate). Now let's say that their tax burden is cut in half, that would mean that now they would only pay $200, or only $200 less than they did before.

To the uninformed, it appears that the higher income earner received a larger tax break than the higher income earner. However, the reality is that the higher income earner only received a 10% tax rate reduction (20 to 18%), while the lower income earner paid 50% less in taxes (taxes were cut in half).

Posted by: Randy in WV | Sep 8, 2008 10:54:52 AM

I'm no economist and I have no background in the field so please forgive me if my premise and/or questions seem odd, simple or misinformed.

Assume the national debt is as good as anything for a measure of the general state of the US economy (lower nat. debt = better economy). Also assume that the data presented above is accurate or at least good enough to consider (i.e., ignore arguments against the data). Further assume there are no additional, tangential influences on the economy (e.g., rich fleeing the country, additional gas tax plans, etc.) or at least do not include them in the analysis. All of this is just to phrase the below question in view of the data presented without the influence of who-knows-how-many other factors and policies.

If the national debt would increase more under McCain's plan then under Obama's plan, wouldn't Obama's plan be better for the US? While it may be preferred to avoid increasing the national debt, wouldn't it be more preferable to increase it less if given the choice?

I can appreciate that one's position on the relative scale of income would affect one's personal attitude to the two plans, as well as one's position on the relative taxation of the rich/poor, but overall wouldn't the country be better off with less national debt?

Just curious what others' reactions to this thinking might be. I could easily be way off and I appreciate any and all criticism or suggestions. I'm trying to learn and understand.

Posted by: AgtShadow | Sep 9, 2008 7:45:04 AM

I didn't see it mention how McCain wants to tax your health benefits which in itself will raise taxes on anybody with a job by $2-4K, and if it has the result that most experts have said it would, that companies would stop giving healthcare benefits, then it would cost more in the neighborhood of $4-8K for a family to get their own healthcare. Not to mention, how many of those people, when they get that check, are actually going to buy healthcare when they have to buy gas and food and pay mortgages? Not many most likely. So now you're back to millions of Americans with no healthcare.

Can you comment on this?

Posted by: jim | Sep 10, 2008 10:47:17 PM

Can we get rid of the myth that tax cuts for the wealthy improve the economy? Bush Sr. was right when he called trickle down economics "voodoo economics."

Tax cuts for the middle class brings about more spending and services thereby creating more business opportunities and increased employment to produce those goods and services.

Giving the wealthy more income only leads to more savings for them, as their purchasing has little effect on creating business opportunities. Their investment in the stock market is merely a legalized form of gambling with capital gains benefits and tax write offs for losses.

Finally, taxes should be far more progressive as the wealthy and corporate America use far more of and benefit more from the infrastructure that we the taxpayers provide.

Thomas Jefferson's greatest fear was that if a small group of citizens became too wealthy, they would create an economic aristocracy which would cause a polarization between the rich and the poor and democracy would vanish.

According to this analysis, by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, for those who make between $227K and $602K the net impact is a reduction of $12. Over $3 million, you're looking at an 11.5% increase.

Many of those who make millions of dollars are fond of saying they don't want the government taking away "their" money. I'd say the people at the bottom feel the same way, and have an equal right to their money.

Also, I've always thought the folks at the top of the income spectrum grossly underestimate the ways in which tax dollars have supported the society that makes their accomplishments possible - from schools (that educate the workers they employ) to infrastructure and the legal system that protects their property and other rights. The current tax levels are not divinely inspired; they represent a philosophy that has clearly led us to great disparities of wealth in this country. I don't see how that serves anyone.

Posted by: Joanne Gainen | Sep 14, 2008 8:48:20 PM

The break-down by income level is really useful, but I'd like to see how much of the population falls in each, not just the top and bottom levels.

More importantly, the "average cut" as posted, is significantly misleading. What is it the average of? It's certainly not representative of the average voter, as Obama's cuts are far greater than McCain's for the bottom 60% of the population by invome, and greater than his, for the next lowest bracket as well. Nonetheless, McCain's avg. cut is listed as being more than 7 times greater than Obama's.

Is this organization independant or a typical Liberal not admitting they are taking sides with Obama. Help us all if Obama is elected! I am a middle class average American who works and earns for his existance. The rich should not be the only ones penalized for their fortune of riches. Most of them is what keeps America working and earning to keep our country going. Why hold them totally responsible for paying the bulk of our taxes. We should all be paying our fair share based on our earnings regardless of what bracket and category we fall under. John McCain is a fair and honest man and dedicated to the stability and welfare of every American. Reading over the comments of others I see no matter what I say is not going to sway your readers but at least I spoke my feelings. Obama might be a good president some day but he is not ready to take on that responsibility until maybe 10 years from now. He is not a JFK who was born into Politics. This has nothing to do with Black or White Americans. If Colin Powell or Condi Rice were running I would vote for them in a heart beat regardless of Party lnes or affiliation.

Posted by: Richard JS | Sep 24, 2008 2:56:44 PM

It is telling that only conservative and libertarian think tanks have published analyses on the impact of the Obama and McCain tax plans on economic growth and job creation.

The Obama plan reduces most people's net taxes by a few hundred dollars at the cost of increased risk of job loss and stagnant wages. Not a good tradeoff.

Posted by: sanchmo | Oct 17, 2008 11:55:17 AM

Obama's tax plan will destroy the Social Security system.

Obama says his income tax plan will lower taxes for 95% of Americans. There is just one problem with this, 40% of Americans already pay no income tax. Obama's response to this is that these people pay Social Security tax. Well, that's not income tax, but a contribution to their retirement plan. So if he wins and implements his tax plan, for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them. Social Security will then loose all pretext of being a retirement plan, and will become a national welfare program.

This will cause Social Security to lose public support in a massive way. Leave Social Security contributions out of income tax plans. If you take some peoples income taxes to pay others Social Security taxes, Social Security will be destroyed forever.

Cindy McCain earned $4 million last year so would pay an extra $700k + under Obama, no wonder John McCain is so opposed to it.

Posted by: Pete | Oct 28, 2008 4:44:31 AM

I am a supporter of the Senator, however his definition of the rich as anything over $250K scares me to death. Why am I being punished? I spent many years struggling to make ends meet and now that I approach retirement the income I struggled to make is is going to be stripped away from my last few years of earning. Please Senator, don't hurt my retirement.

Posted by: Michael Croy | Oct 28, 2008 9:09:56 AM

Obamas tax plan does not promote small business growth. If I am a small business owner with annual sales of $250K, what incentatives does the Obama tax plan give small business to grow above that $250K level, knowing that you going to pay more taxes. So... the long hours and hard work that is inputed, goes to someone else. This tax could prevent a small owner from hiring more help (creating jobs), purchase benefits, and operational supplies.